Banks in Malta may need to reassess their dividend policies

"Combined with the probable introduction of more stringent capital and liquidity requirements in the period ahead and the likely pressure on profitability deriving from an unfavourable economic conjuncture, the expected increase in credit risk suggests that the banks may need to reassess their dividend policies in order to be able to support a commensurate amount of capital."

The Governor of the Central Bank, Michael C. Bonello, made the above comment in his statement introducing the Financial Stability Report 2009, published earlier today by the Central Bank of Malta.


"Against this background of heightened instability and risk, the proposals currently under study to strengthen regulatory regimes, and in particular those of the Basel Committee designed to increase the resilience of banks through the adoption of stricter capital and liquidity regulations, assume particular relevance. Their early implementation is now becoming a matter of urgency" he went on to say.

The selected institutions for this financial stability analysis were:

APS Bank Ltd
Banif Bank (Malta) plc
Bank of Valletta plc
Bawag Malta Bank Ltd
HSBC Bank Malta plc
Lombard Bank Malta plc
Volksbank Malta Ltd


The full report can be read here.

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